Although cloud services continue to be a hot IT topic, a 2010 Quest Software survey revealed that 40 percent of businesses interviewed had yet to adopt a cloud solution and that, "After an initial surge of adoption, growth will slow until remaining companies see proof of success from early adopters." A 2010 survey of senior level IT professionals conducted by Electric Cloud, a private development cloud company, and Osterman Research revealed that 52 percent of companies using cloud computing have cloud infrastructure resources that are rarely or never used and that 47 percent report some or lots of excess capacity. Gartner further reported that many companies are taking their on-premise bad habits into the cloud--like paying for unused software, also known as shelf-ware.
This brings us to the story of The Williams Companies, with an Exploration & Production division recognized as one of the nation's largest natural gas providers, and Transzap, an energy sector SaaS (software as a service) company known throughout the industry by the Oildex brand. More than 9,000 companies use Transzap's ePayables, eBudgeting, eRevenue and eStatement solutions.
"We'd reached the point where we were processing over 14,000 invoices per month for our suppliers, and we were unable to process these invoices within the 30-day timeframes for payment that we had committed to," says Tim Haltiner, a Williams Production Team Leader. "Between late fees, operational costs and vendor relationship issues, our internal payment processing operation was costing us money."
The cost was being incurred through penalties and late fees that Williams was being charged from its suppliers. The culprit? An internal legacy accounts payable system that was virtually impossible to modify and that had operations so complicated that it was also impossible to meet vendor requirements of issuing payments to invoices within 30 day timeframes.
"This was a major issue for us because we were being assessed late payments and penalties, and we were unable to take advantage of valuable early payment discounts. This directly impacts the business' bottom line," says Haltiner, who reports to the end business (and not IT) in his role as a production team leader.